LTU Karachi’s collection up 8pc to Rs198bln in July-Aug

KARACHI: Large Taxpayers Unit (LTU) Karachi collected Rs198 billion of revenues in the first two months of the current fiscal year, up 8 percent year-on-year as economic activities began recovery after lifting of the lockdown, official data showed on Friday.

The unit, which has been renamed as Large Taxpayers Office Karachi earlier this month, collected Rs183.9 billion in the corresponding period of the last fiscal year.

Revenue breakup showed that the collection of sales tax (domestic and import) registered 4 percent growth to Rs171 billion during the first two months. That was compared with Rs164 billion in the corresponding period of the last fiscal year.

The collection of sales tax (domestic) posted an increase of 59 percent to Rs46 billion. That was compared with Rs28.96 billion a year earlier.

Sales tax on domestic goods increased due to resumption of industrial and manufacturing activities after lifting of lockdown. The government lifted the coronavirus related lockdown in August after five months.

The revenue collection was already witnessing consistent decline till the end of February. Coronavirus broke out late last year in China and spread at a fast pace across many countries of the world till February-end. The contagious infection incurred huge losses to global financial markets.

The collection of sales tax on the import stage fell 5 percent to Rs129 billion during the first two months of the current fiscal year. That was compared with Rs135 billion in the corresponding period of the last fiscal year.

The unit issued Rs3.5 billion as sales tax refund during the period under review. The unit issued Rs7.73 billion as income tax refund during the first two months, 288 percent higher when compared with Rs2 billion issued in the same period of the last fiscal year. The net collection of direct taxes posted 74 percent growth to Rs20 billion in July-August FY2021. That was compared with Rs11.5 billion the same period a year ago.

In August, the collection of the tax unit fell due to lower collection in the head of sales tax at the import stage, according to sources. They said rains during the last week of August adversely affected the supply chain and manufacturing activities. Industrial and manufacturing activities also slowed down in Muharram.

Industrial units had recorded attendance drop to 20 percent of workforce amid heavy rainfalls. Operations at different ports in the metropolis were mostly suspended after record monsoon showers left them inundated, bringing the cargo/shipping handling to a halt, which was causing traffic congestion.